CBOE Global Markets, Inc. (Cboe: CBOE) has released its Q4 2018 financial results and as well as for the full year, beating analysts estimates by a wide margin.
The company recorded strong growth in net revenue, operating profit and operating margin during the time period. The net revenue in the final quarter of 2018 was reported at $334.4 million, which 26 per cent higher from $265.6 million in Q4, 2017. The operating income during the quarter came in at $176.4 million which is 62 per cent higher compared to $108.7 million in Q4, 2017. On an adjusted basis, the operating income is 39 per cent higher to $222.6 million from $160.6 million.
The operating margin during the quarter came in at 52.8 per cent whereas, the adjusted operating margin is 66.6 per cent. Compared to the increase in revenue, the operating expense rose marginally by 1 per cent during the quarter. Further breaking up the revenue by the company’s business segment, the details are as follows:
Options
The net revenue generated for Options is at $174.5 million, which is 39 per cent higher compared to Q4, 2017. The increase during the quarter was primarily due to higher transaction fees from increased revenue per contract and an increase in trading volume. The average daily volume of options traded grew by 23 per cent.
US Stocks
The company’s US Stocks business grew by over 18 per cent or $12.5 million to reach $81.5 million. The growth was fueled by an increase in net transaction fees which was driven by 33 per cent jump in average daily trading volumes.
European Stocks
Cboe’s European stock business generated a revenue of $24.3 million, which is 29 per cent higher from Q4, 2017. The increase in revenue was attributed to growth in net non-transactional and transactional revenues. The company also maintained a leading position among Pan-European stock exchanges in term of its size and market share at 22.7 per cent.
Global Forex Revenue
The company’s net revenues from forex trades grew by nearly $1.7 million to $13.7 million, translating a 14 per cent increase driven by growing net transactional fees as compared to Q4 2017.
Regarding the financial guidance for fiscal 2019, the company expects a slight 2 per cent increase in operating expenses and is predicted between $420 million and $428 million. The company has declared a dividend of $0.31 per share, making a total dividend payout at $34.7 million in Q4,2018.
Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer commented on the results:
“Our record results were fueled by growth across all of our business segments and, most notably, in our suite of proprietary products. Additionally, we continued to make steady progress towards achieving our synergy targets while remaining focused on executing our strategic initiatives and defining markets to serve investors globally, as demonstrated by our announced rollout of Cboe Select Sector Index Options on 11 industry sectors that comprise the S&P 500 index. We are well-positioned to continue to deliver value to our customers and shareholders. A tremendous team effort made 2018’s record results possible, and we are very excited about all that we can accomplish in 2019, including the final phase of our multi-year technology migration, which we plan to complete in October.”
